Aurora closes Acquisition: It's a merger which is considered to be the biggest cannabis industry transaction to date, and as of yesterday, the agreement between Aurora Cannabis (TSX:ACB) (OTCQX:ACBFF) and MedReleaf (TSX:LEAF) (OTO:MEDFF) has officially been closed.
The agreement was first announced in May of this year.
Med Releaf and Aurora Closes Acquisition, What's Going On?
In a transaction valued at more than $2.5 Billion, Aurora Cannabis has not only acquired rival producer MedReleaf Corp., it has set a new record; this is more than double what the company paid out to CanniMed Therapeutics (which it acquired in January of this year) making it the most expensive deal in cannabis history to date.
Already the king of acquisitions, Aurora has been on a six-month spending spree turning itself into an industry behemoth, now more akin to Canopy Growth Corp. (TSE:WEED) (NYSE:CGC) in size. This merger will see the company own large-scale cultivation spaces in Alberta and Ontario along with facilities in other provinces across Canada.
Also in acquiring MedReleaf, Aurora takes control of what is already a well-established and popular brand in the medical cannabis sector. It has a strong portfolio list and well-developed product line with secure and long-term patient listings. In the recent weeks, it had also included several recreational brands such as San Rafael ‘71 and Woodstock in preparation for adult-use legalization in Canada in October.
According to the Press Release on behalf of MedReleaf, the company said:
"Our large-scale, high technology production facilities, strong science, R&D and product development capabilities, diversified product portfolio, and growing domestic and international distribution networks provide Aurora with significant competitive advantages in both the Canadian and global cannabis markets."
Aurora: A Cannabis Giant
Aurora's CEO Terry Booth said on the acquisition:
“The closing of this transaction brings together two vertically integrated, successful pioneers in the cannabis industry, creating a company with more than 1,200 employees and a rapidly growing domestic and international footprint,”
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MedReleaf shareholders will be given 3.575 Aurora Shares for each MedReleaf share they hold. This brings the entire share amount for Aurora now to 900 million shares.
Despite the merger, Aurora stock dropped 2.4 percent on Wednesday, closing at $6.94 - its lowest close since early December.
But it's not all doom and gloom! The company still boasts an impressive market cap still in an around the $9 Billion mark.
Featured Image: Deposit Photos/depositedhar
